How Country of Origin Image Can Affect International Business Success and Further Internatinal Expansion.

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  • Topic: Brand, Brand management, Branding
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Country-of-origin in business term means the original country of products or companies. This is identifying through its image toward their customers in different culture-environment. The content would describe the country-of-origin image’s definition. Then, it would lead on possible effects toward international business success and future expansion. During those titles, examples would be shown in particular cases along with factors that might affect on country-of-origin module.

Dictionary of Business said image is “general idea which the public has of a product or of a company; they are spending a lot of advertising money to improve the company’s image; the company has adopted a down-market image”. Country-of-origin image is defined in many terms as Wang and Lamb (1983), Johansson et al (1985), and Ozsomer and Cavusgil (1991) (cited Al-Sulaiti and Baker 1998; p.150).

According to Wang and Lamb (1983), country or origin effects are intangible barriers to enter new markets in the form of negative consumer bias toward imported products. Johansson et al. (1985) and Ozsomer and Cavusgil (1991) define country of origin as the country where corporate headquarters of the company marketing the product or brand is located.

Or as Nagashima (1970 cited Yasin et al 2007) said

…the picture, the reputation, the stereotype that businessman and consumers attach to products of a specific country. This image is created by variables such as representative products, national characteristics, economic and political background, history and traditions.

Nowadays globalization makes world connecting. Combined and linked each region together. Those give alternatives choices of products to consumers. Looking through consumers’ view, country-of-product’s origin (COO) might affect their decision above quality of products. Even though there are such a competition in that goods, its image still affect to purchasing decisions. According to Schooler (1965, 1971 cited Balabanis and Diamantopoulos 2004: p.1) said that “foreignness” might effect on preferable of domestic consumer. As products’ sale depends on popularity among customers’ needs, in some countries might show their nationalism or “consumer ethnocentrism” (CE) (Balabanis and Diamantopoulos 2004: p.1). The example of those countries is Japan. Japanese is nationalism country. Its citizens have awareness on their national products. As they have such a proud in their own country, Japanese mostly consumes their own brand of products. Even if this trend is fading away from its society as the effect from western culture invasion (Hanabusa, 12/28/04, The Japan Times), younger generation still has the image of their own products are better than the others. As still they consume their own technologies brand like SONY, Docomo (cell phones). To beat such a competition in nationalism-environment, company must concern on building COO image to survive in segment. Negative COO Image’s company could not against those local companies.

Not only local company which might affect on success in that country, still the other competitors in domestic market have impact on it. In the case that the other brands in the segment has earned such a big chump of market share with very strong image on its COO like Honda, Toyota, and Mercedes. Their customers have already got the image that they have such a reliable on their products’ quality as automobile segment is admitted that Japanese is more reliable with less repair cost whilst American was known as bigger and safer car (Kim and Chung (1997; p.3).

Beating with big companies requires more than just good products but building relationship with customers to overcome those competitors are far more challenging. If COO of the company has got the country’s image where customers in that region or country have bad image on it, it might affect in a great deal for getting some position in segment. Products’ quality is the majority on customers’ decision in this...
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